As an influencer, you might monetise your work through brand deals, sponsorships, host reads, streaming services, video platform revenue, subscription services or any combination of that list.

With so many revenue streams, such variety in jobs, and so many other possible questions, keeping your accounts accurate and compliant can be a full-time job of its own. Here are some key elements we recommend you watch for.

Do Account for Every Stream

There’s a persistent bit of tax misinformation out there which states that if an individual revenue stream is below a certain threshold it can safely be ignored. Needless to say, this is untrue!

All the same, whoever first spread this about was clearly very persuasive. Many people still believe this claim today, and it can create major issues for them once they start filing incomplete returns.

Know Your Expenses

If you upgrade your cameras, microphones, or lighting over a tax year, these would certainly be allowable expenses. The same would be true for ongoing subscriptions relevant to your work, new editing software, and a number of other items.

However, if you’ve bought something both for your professional work and your own use, and if you’ve spent enough that you might exceed expense limits, this becomes more complicated. We recommend consulting someone who can advise you on specifics before you make major purchases that might be affected, and don’t forget to keep a running tally through the year.

Be Ready to Register for VAT When You Need to

If your total turnover exceeds the VAT threshold in a single year, or you expect it to do so in the next 30 days, you must be VAT registered. As that turnover could include many different, tiny streams, keeping track of it is essential until you actually register.

At the time of writing that threshold is £90,000.

Understand How Business Structures Affect Your Bottom Line

As a sole trader, a partnership, or a limited company, the way you pay yourself, your tag obligations, your profitability and your personal liability can all vary. What company structure you use is a major decision factor as a result.

More importantly, these factors are influenced by your income, your expenditures, plans for expansion and even your tolerance for financial risk.

We strongly recommend discussing your situation with an experienced accountant who understands your field before making a decision. Why not get in touch to find out more?

The post Accountancy Tips for Creatives & Influencers first appeared on ICS Accounting.

Early on, you can track your finances with Excel or in Google Sheets. When you start paying employees, you can still fit that on your sheet. At some point, though, there will come a point where a spreadsheet doesn’t give you the fine detail you need, and you need to invest in better bookkeeping software.

As a firm of accountants supporting small businesses, we deal with businesses exiting this stage on a very regular basis. That’s why we feel qualified to say:

Don’t do this.

Why not?

There’s No Double-Check

Before accounting moved from paper ledgers to software, the term double-entry bookkeeping emerged. When you add incoming revenue or outgoing expenses, you’ll enter it twice, and this provides an opportunity to check that it was entered correctly the first time.

Some modern accounting software allows you to do things like import PDF invoices or scan receipts directly into the system. Even then, there’s a cross-check to ensure that the totals being recorded are right.

When you enter figures into a regular spreadsheet, it doesn’t necessarily cross-check them. Just as importantly, if your calculation formula has an error in it, the only way you’d know is if it causes an error message. More likely, your spreadsheet is just going to show you an inaccurate number, with no good indication that it’s inaccurate.

It’s Not Compliant

Perhaps it would be better to say, it’s easy to become noncompliant this way.

The threshold at which you must enrol into Making Tax Digital dropped this financial year, and it is likely that either in 27/28 or 28/29 it will drop again. Small businesses will be dealing with Making Tax Digital earlier and earlier in their growth.

Overall, we have to say this is a good thing. The Making Tax Digital initiative is encouraging better financial hygiene in small businesses and giving business owners, stakeholders, and decision makers a clearer sense of the monetary impact of their decisions.

That means you can move away from bad decisions more quickly and put more weight behind the tactics that are working.

Spreadsheet accounting will not cut it in a Making Tax Digital world. Your information must be accurate, up to date, and it must be submitted in specific formats. However proud you are of your spreadsheet wizardry – and we do respect an XLOOKUP executed correctly – the simple fact of the matter is that spreadsheets aren’t designed to do this.

It’s Time Consuming

One of the other benefits to modern accounting software is that a lot of data entry becomes automatic. Invoices can be automatically filed, payments noted automatically, payroll systems are integrated – so much manual work has been replaced, which both saves you time and minimises the chance of error in entry. This is a huge benefit.

It’s Never the Best Time to Switch

The whole myth of using spreadsheets early on is built around the idea that once you hit a certain point, it’s the right time to switch. In practice, transitioning from spreadsheet to modern software requires you to learn new habits, unlearn other habits, and transfer a significant amount of data from one system to another.

As your business grows, this is always a huge time investment you can see coming, and the temptation must always be there to take a look at that time investment and put it off. Businesses that start on Excel end up with a perverse incentive to stay with the old ways for much longer than they should do.

Far better to start off the right way and get into good habits from the start so you don’t have to unlearn them later.

We hope you’re reading this article with time to make the right decision from the start, but we know that some of you will already be well embarked on your spreadsheet and wondering how to transition.

If you’re dreading it, why not give us a call? Having the support of experienced accountants will make the process much more efficient.

The post Beyond the Spreadsheet first appeared on ICS Accounting.

The post IR35 FAQ first appeared on ICS Accounting.

As well as more heat, July brought us a change of Prime Minister! With new cabinet appointments and impactful legislation from the off, we’re poised to be your assured accounting and trusted compliance partners, whatever financial, employment and regulatory changes follow. After the highs and lows of the World Cup, we’re looking forward to the European Athletics Championships coming to Birmingham, while enjoying a bit of golf, football, horseracing and cow-whispering- read on to find out! 

Keeping Our Cool: 

With lollies and ice creams keeping us refreshed in the office, it wasn’t just the temperature testing the ICS team… Megan’s rail journey to London took an unexpected turn thanks to a herd of cows on the track. With “helpful” comments and advice from the office, mobile working saved the day: a day that involved a 6-hour journey! 

An example of how invaluable earbuds are, and so frustrating when we misplace or lose them. Jamie-Alice was in this position until hers turned up after 3 months in the cold, rain and scorching sun of the garden; even better- fully working! A great example of resilience, which we build into ICS compliance frameworks, policies and safeguards to withstand the twists and turns of the real world- without missing a beat! 

Out & About: 

After an ad-hoc lesson in cow-herding (thanks to the trains), Senior Business Partnership Manager (and glamorous cowgirl) Megan led the charge, including visiting partners in Birmingham, London, Stockport, Warrington and Manchester. 

The annual FCSA (Freelancer and Contractor Services Association) conference in London is always an invaluable opportunity to gain key regulation and compliance insights and takeaways, especially with the current political changeover. The ICS Senior Management Team enjoyed catching up with fellow professionals and joining the conversation, thanks to the organisers for another great event. 

People News: 

Welcome back Karen to the Payroll team, and huge congratulations to Kieran, who has passed his probation with flying colours! Becoming a valued member of the team, plentiful feedback from clients highlights Kieran’s care and dedication to building personal trusted relationships, a brilliant achievement so soon into the role- well done! 

There must be something in the water: after joining the business just three months ago as a New Business Executive, congratulations to Jasmine on her well-deserved promotion to Account Manager. Particularly enjoying being part of a supportive team, Jasmine is already building strong relationships with our agency partners and becoming someone they know they can rely on. Providing swift and direct access to your account manager is something that sets ICS Accounting apart; if you need us: just get in touch. 

Drumming Hooves and Laying Down the Beat 

Surprisingly, we occasionally allow our hardworking team a few hours off for good behaviour, and they made the most of the summer weather. Megan headed to Chester races, while Alison hopped on a plane, chasing even higher temperatures before seeing Foo Fighters live, a real “bucket list” moment. Thinking decibels not SPF, Kevin’s journey back into making music saw the delivery of a stonking new drum kit- we hope he’s got understanding neighbours! 

“Hole” Lotta Fundraising Fun 

Thanks to payroll software specialists My Digital, who hosted a fantastic golf tournament at Carden Park, a great opportunity to break out of the office, build relationships, and socialise in a relaxed setting. We also had members in the winning team! This month we were also proud to sponsor a hole at the Scott Aerospace Ltd – SARTAN GOLF Charity Tournament 2026, bringing hundreds together and raising thousands of pounds for the Alzheimer’s Society. Days like this take a lot of organisation, so well done to all involved! 

Gratitude Gallery: 

As our Gratitude Gallery initiative comes to a close, its effects on people’s outlook continue to spread. We loved Jamie-Alice’s observations and pictures of a dog that definitely looks more like a goblin! In the mantra of “do something every day that scares you”, Alison was asked to sing the national anthem at Flixton Football Club’s opening game! In front of around 2,500 spectators, being introduced by the legendary Alan Keegan, iconic voice of Old Trafford, made it even more special. Rounding off a memorable day, her daughter also stepped up at half-time to take a penalty in front of the crowd. Well done to everyone involved in bringing Flixton Football Club back to life, rewarded by a 3–2 win! 

Onwards & Upwards 

We’re very proud that we have been shortlisted in three categories at this year’s Contracting Awards. A real demonstration of the best practices and providers in the sector, and everything we strive to do for our clients, congratulations to our fellow finalists. A huge thank you to our clients, agency partners and contractors for your continued trust and support; fingers crossed for the final in September- we’ll let you know!  

With a fantastic reaction to our new ICS Umbrella Plus, we’re excited to reveal we’ll be launching another offering specifically for Qualified Social Workers in the coming weeks. 

Wishing you a great schools-out summer,  

Your ICS Accounting Team.

The post Facing our Fears, Braving the Heat, and Herding Cows- July at ICS! first appeared on ICS Accounting.

Whether you’re going to be filing a self-assessment tax return or you’re managing finances for a company, some jobs definitely need doing. Others may be specific to your business structure or even to your business itself, so feel free to use this checklist as a baseline and add whatever seems appropriate.

Reconcile Your Accounts

We recommend regular reconciliation, but for that reason we also suggest that you put it on as many checklists as possible so that you’re always on top of it.

The kinds of financial problem that reconciliation highlights are the kind that do their damage over time, so the earlier you catch and correct them, the happier you’ll be.

Quarterly Performance Review

We always recommend regularly checking in on your financial situation. At the end of a quarter, do a little bit more; don’t just look at your current numbers, but compare them to the end of the previous quarter and to the year before. Do any trends stand out? Have your gross and net profit margins changed significantly? Are any costs particularly rising?

Whatever comes up (if anything) make a note of it to investigate later.

Mark and Chase Overdue Payments

Look at outstanding payments past due. How many of them are there? How big a proportion of your income do they represent? How many of the businesses owing money now owed money last quarterly review?

Wherever possible it’s worth automating payment reminders, but that comes with its own problems, so take the time to check manually.

Mark and Pay Overdue Invoices

The same issue comes with a flipside. Sometimes, especially for a small business, payments can slip through the cracks, especially if you had to defer them initially. Outstanding invoices have a habit of finally needing to be paid just when your cashflow is at its worst, so including this step on your quarterly checklist is designed to catch them before that happens.

Check Your Tax Deadlines

Make sure you know what payments may be coming up soon. These can include PAYE payments, National Insurance Contributions (NICs), VAT returns, corporation tax, or personal tax payments if you’re a director.

Knowing what your current tax liabilities are helps you to manage your liquidity and make better plans.

Check for Improvements

Are you satisfied with your profit margins? Could automation or improved process reduce major costs? If you have plans for expansion, are you positioned to follow through or does more need to be done?

These are all areas where you’ll often find opportunities to improve. After reviewing your quarterly performance, you should have the information you need to make plans.

Draw a Line Under the Quarter

Ultimately, what’s done is done. If your review of Q1 tells you that you could have done more, remember that and use it to fuel Q2, but any extra time spent beating yourself up over errors is wasted time. If your review tells you it was a great quarter for your business, try and build on that in Q2, but don’t dwell on your success and get complacent.

A quarterly review helps you understand your financial position. It gives you a better perspective on successes, failures, profit and loss. But Q1 is done now; it’s time to focus on Q2.

If you feel like your next quarter will benefit from deeper financial insights, get in touch and we’ll be happy to help.

The post End of Q1 Financial Checklist first appeared on ICS Accounting.

Know Exactly Where You Work

For most purposes, including taxation, UK waters are defined as our territorial waters out to 12 nautical miles from the nearest coast, and a few other designated areas. If you find work on a rig outside these waters, perhaps in another nation’s agreed oil exploration areas, you will be paying tax elsewhere, under different regulations.

As such, from the moment you receive a job offer it can be important to know which waters you’ll be working in.

Double Check Double Taxation

A number of offshore oil workers we’ve spoken to have been surprised at least once in their career to discover that they’re working in a country that doesn’t have a Double Taxation Agreement (DTA) with the UK.

Despite the name, DTAs are actually a good thing; they’re designed to prevent situations where a worker is ‘double taxed’, having tax obligations to two different nations at once, while still ensuring that both governments are happy with the tax situation. As you can imagine, this is a fine line to walk!

The UK has more than 100 different DTAs with other nations. These include the Netherlands, Germany, Denmark, and Norway – all major nations in the North Sea oil and gas industry.

Understand Your Tax Implications

As well as working in UK waters or in a nation with a DTA, the factors that can affect your tax obligations (and your available tax opportunities) as well as National Insurance contributions include:

• Do you work for a UK company?
• Are you a UK national or a foreign national?
• Are you paid through your own limited company and, if so, where is it registered?

Overseas contracts are likely to trigger foreign tax reporting requirements. Operating through a UK limited company will raise considerations of corporation tax and dividends.

Consider IR35 Compliance

As always, whether or not you’re in compliance with IR35 is a huge factor in the end value of what you’re paid. For offshore workers, you’ll be working in a specific location, which is part of the test of control that’s part of the IR35 status tests. This makes it even more important that you look at the rest of these tests to ensure you have a correct determination.

As always, there are many other factors that can significantly affect the profitability of a given contract for offshore oil workers, but the above summary covers the most common questions. If you believe you may be affected by another factor and want an expert opinion, or if you simply want to understand exactly what the tax implications of a given role are in the 2026/27 tax year, please get in touch to arrange a discussion.

The post Accounting Tips for Offshore Oil Workers first appeared on ICS Accounting.

It’s possible that as you read this you’ll think of some oddity not covered here. As always if you believe yours may be an edge case, we recommend you contact us to have a discussion about your specific circumstances.

What’s the Minimum Number of Employees for a Pension?

While this question comes up a lot, the answer is: one. Your first eligible employee must be enrolled into a pension scheme, and the scheme should ideally have been set up before they start working for you.

However, if that first employee earns £6239 or less per annum, whether or not you pay employer contributions into the pension is optional.

What Makes an Employee Eligible?

Employees are eligible and must be enrolled into your pension scheme if any of the following are true:

• They are between 22 and 66 (current state pension age)
• They earn more than £10,000 per annum
• Neither of the above are true but they have requested to be put into a pension scheme

What Obligations Do You Have to Employees Outside the Scheme?

It’s your responsibility to monitor whether that eligibility changes. This is as simple as tracking age and annual earnings.

Non-eligible employees who are about to become eligible must be informed in writing of when they will become eligible and what will happen when they do.

Lastly, you’ll need to carry out a declaration of compliance to be submitted to the Pensions Regulator. For more on this, see the Regulator’s own guide here.

What Do I Tell Eligible Employees?

Eligible employees must be told in writing what being on your pension scheme means for them. For the most part, your pension provider will handle this for you.

How Much Are Employers’ Contributions to a Pension Scheme?

The legal minimum employers’ contribution to the pension scheme is currently 3% of an employee’s qualifying earnings between £6240 and £50,270 per annum. These figures are reviewed annually, so be prepared for them to change periodically.

Qualifying earnings include salary, commission earned, and bonuses and overtime paid, as well as statutory pay for maternity, paternity, adoption, or sick leave.

Many businesses in the UK offer pension matching, where they pay 5% of salary (the figure the employee pays) as a tool to help retain employees, although this is relatively uncommon in small businesses.

When Are Payments Due?

Pension contributions must be paid by the 22^nd after the month following the paycheque. The amount due should be calculated when payroll is run, so you’ll always know what to pay well before it’s due.

What Do I Need to Know About Pension Tax Relief?

Tax relief is earned on the tax that would have been owed for their pensions. This relief is based on the highest rate of income tax paid, but the pension annual allowance provides a cap on this relieve. This cap is £60,000, or if your salaried income is less than that, the cap is set at 100% of your income.

To answer any other questions or to enrol in our outsourced payroll service, get in touch.

The post Small Business Pension FAQs first appeared on ICS Accounting.

Well, didn’t June bring the heat! We hope you stayed comfortable and weren’t too impacted by challenges as the good old British infrastructure struggled to cope. In and out of the office, ICS kept our cool, whether on the road visiting clients, partners and employees, cheering on our national sports teams (not just football, and not just the men’s!), as well as finding inspiration to add even more core benefits to ICS Umbrella – scroll on to read all about it!   

Convening and Collaborating 

Colin set the alarm early to attend CMR Recruitment’s very timely Manchester breakfast seminar focusing on the landscape post Joint and Several Liability (JSL). Great opportunity to catch up and network, as well as thought-provoking presentations from a panel including Josh Bramhall, Daniel Moss, Sebastian Sauca and Hannah Morrison. Uplifting to know that responsible agencies’ early compliance groundwork is paying dividends for employees in terms of trust, care and transparency. 

Helen enjoyed representing ICS at the Lancaster & Morecambe Chamber of Commerce’s June networking event. With lots going on in the area, including the landmark first “spade in the ground” of the Eden Project Morecambe, it was a vibrant, positive sharing of information, plans and ideas.

Travel Diary 

Record-breaking temperatures or not, our sales and partnership support teams were travelling the land, combatting train strikes, melting railway lines and intermittent air conditioning! Sales Manager Alison led the charge, travelling to Manchester and London, where she was joined by Account Manager Kieran. 

Fantastic to see the enthusiasm for our new Umbrella Plus package, especially the inclusion of Bupa healthcare for all umbrella contractors (see more below). Whether it’s our Northern heritage, but we love direct and face to face contact with our clients, partners, contractors and employees, so get in touch to find out when ICS are in your area, or schedule a visit. 

People News 

Hugely pleased to announce Jodie Mace’s promotion to Associate Director of Compliance & Operations. No-compromise adherence to compliance and consistency is our watchword at ICS Accounting, and throughout almost 15 years’ dedicated service, from Customer Service to the last 7 years as Head of Compliance, Jodie has been instrumental in developing the watertight policies and procedures that protect our business, agencies, clients and contractors. MD Colin says: “Jodie has become one of the rocks our business is built upon and I’m excited to see how she will continue to positively influence in this wider role.” Congratulations, Jodie! 

Well done also to Luke, passing the next level of his ACCA (Association of Chartered Certified Accountants) Financial Management exams. Congratulations to Deborah Gardner at our partners Hanley & Co. Accountants, who has welcomed a new grandson. And clearly not put off by the heat, some of the team have been beating the Lancaster University Trim Trail in preparation for taking part in Born Survivor in September, we’ll share their progress (from the sidelines!) 

Windows onto Gratitude 

When the world can seem confusing, and life hectic, it’s always worthwhile to slow down and really notice the small details, like family moments, pets or walks. This is the tenet of our Gratitude Gallery initiative, facilitated by professional photographer and former NHS mental health services occupational therapist Ginny Koppenhol. Capturing informal smartphone snaps of appreciation from everyday life for our office gallery also helps us connect as individuals rather than job titles. 

Beautifully illustrated by this moment of observation from Jodie: 

“I spotted a painted stone in my garden that my son and I made during the COVID-19 lockdowns. Despite the uncertainty we all faced, I’ll always treasure the extra time and simple moments I had with my little boy. With recent industry and legislative changes, life can feel hectic, so seeing that little painted stone was a good reminder of the importance of staying centred. Sometimes the smallest things bring the biggest perspective.” 

Summer of Sport 

You can’t have escaped that there’s been a certain football competition going on. While we dream of scoring the winning goal, our Men’s World Cup sweepstake, with prizes including lunch for the whole team, is hotting up ahead of the final. 

Before then, we have the final of an equally exciting competition for skills, thrills and upsets, the ICC Women’s T20 World Cup. One of the most open contests in years, with the school holidays approaching, it’s enthusing many of us to get out on the pitch, park or playground with our own little sports stars. 

Umbrella+ 

We’re always striving to offer ICS Umbrella Employees more than “just” trusted, compliant and seamless administration and delivery of your salary, tax, deductions, pension and benefits. So we’re thrilled to have launched Umbrella+, a significant upgrade that includes: 

• BUPA Cash Plan, for everyday healthcare costs like dental check-ups, eye tests, and physiotherapy 

• Greater pension flexibility with no increased margin or admin fees for SIPP contributions 

• £100 emergency pay advance facility for unexpected situations 

In addition to:  

• Discounted retail cards from over 120 brands 

• Up to 60% off cinemas nationwide 

• Over 500 vouchers and promotions from the best brands updated weekly 

• Discounts at leading events and attractions 

• Huge discounts at hotels worldwide 

And of course: 

• Full employment rights 

• Dedicated UK-based support 

• SafeRec verified payslips 

• FCSA accredited services 

• Your information and records available 24/7 

• Easy access to your personal ICS advisor 

So, if you want to check you’re getting the full benefit of ICS support, or are interested in discovering more about any of the outstanding bespoke contractor, accountancy and umbrella solutions we offer across a wide range of sectors and specialisms, just get in touch. 

Wishing you a Goldilocks July (not too hot, not too cold, please!),  

Your ICS Accounting Team 

The post Keeping Our Cool and Feeling the (Additional) Benefits in a Record-Breaking June first appeared on ICS Accounting.

We call this the bloke-down-the-pub effect, but for business owners dealing with corporation tax it’s more likely to be a mentor or a former colleague who was talking in very general terms.

It’s always vital to ensure that you are paying all the tax you are liable for, and it’s important to know what tax you shouldn’t be paying.

So here’s a guide to corporation tax for SME owners, covering some of the most common points of confusion. This guide is written in 2026; if you’re reading it in the 2027/28 financial year or later, we recommend you double-check with us in case things have changed.

Do You Need to Register for Corporation Tax?

When a limited company is formed, it is automatically registered for corporation tax. (Sole traders and partnerships are not liable for corporation tax).

Limited companies set up in recent years almost certainly have all relevant services connected to their business tax account. However, if you’re not sure this has been done, talk to your accountants or follow this government guidance.

What is Corporation Tax Payable On?

Taxable profits for the purpose of corporation tax includes:

• Trading profits from doing business
• Chargeable gains from selling business assets at profit
• Returns on any investments

The amount of tax owed is calculated after the payment of salaries and other deductible business expenses, but before the withdrawal of dividends.

Capital allowances can be claimed on the purchase of machinery, other equipment, or business vehicles bought for your business. You can also claim for the ongoing costs of running your business.

However, you cannot claim for anything for which you or your employees use personally; these must be treated as a benefit.

Other tax reliefs include marginal relief (of which more below), profits received for patented inventions, spending on R&D, reliefs for creative industries, and several others. Depending on your business you may or may not qualify for some of these more obscure reliefs, but the full list is beyond the scope of this blog; if you think you may be covered we recommend discussing specifics with your tax accountant.

When Does Marginal Relief Apply?

The main rate of corporation tax is 25%, but this is only when your taxable profit is £250,000 or higher.

The small profit rate for corporation tax is 19%, but this is only when your taxable profit is £49,999 or lower.

In between £50,000 and £250,000, marginal relief applies.

Please note here: If your limited company is one of a group of associated companies, the calculation for marginal relief is different than it would be for a single limited company. This is a result of legislation against a single business being broken into smaller sections that might all qualify for small profit rates or marginal relief.

The simplest way to look at marginal relief is that that 6% increase in tax is applied on a sliding scale between the two. However, calculating the level of marginal relief itself is a complex process; rather than something that’s easily calculated by rule of thumb, there is an official government marginal relief calculator.

What is Credit Interest?

If your corporation tax is paid early, HMRC will pay interest on the payment. This is called credit interest, and it is always set to be 1% lower than the current Bank of England base rate.

Credit interest is paid between the date you pay and the payment deadline, with the earliest date to be paid being 6 months and 13 days after the beginning of your accounting period.

Interest is allocated on the day of the payment deadline. It is treated as taxable income.

If you overpay your corporation tax early, interest is only paid on the due sum, and small sums would usually be carried forward to be offset against future tax liabilities rather than being repaid.

Of course, any payments made in this manner take money from your account, where you might otherwise use it in the business.

As you can imagine, while there are circumstances where there’s particular value to paying corporation tax early, whether or not it’s a better option than something else is very dependent on your circumstances. We would always advise decisions of this sort be taken only after expert advice.

One thing, however, we do recommend against. Payments should not be made late!

The post Corporation Tax and SMEs first appeared on ICS Accounting.

There are several knock-on financial effects for landlords.

• New regulations provide greater incentives for homebuyers, reducing the renting population
• Finance to expand can be harder to arrange
• Even welcome changes like the increased AML introduce additional costs in time and money
• Taxation changes can further reduce profits

The combined impact of these factors can be reduced by working with specialist property accountants like the ICS Accounting landlords team.

Identifying Tax Opportunities

The tax situation for landlords is notoriously confusing, so much so that HMRC published a document setting out example errors commonly made by landlords. This was last updated in 2017, so don’t treat those issues as current – but it’s not something they do for every industry, so that definitely tells you something!

We highly recommend that you double-check you fully understand your tax obligations not just when filling out your tax returns but throughout the year. With a clear understanding and careful planning, you can make the most of the tax opportunities you’re eligible for, and you may make decisions that reduce your overall tax liability, all while remaining fully compliant.

In particular, if you’re looking to sell some of your property portfolio this year, it’s well worth being aware of the potential Capital Gains Tax (CGT) implications of your sale, as well as any other charges that might apply. When divesting yourself of properties, a strategy can really help you to minimise effects.

Buy to Let Limited Companies

The 2020s has seen an explosion in the number of landlords incorporating as limited companies. This has one huge advantage in that it introduces a barrier against full financial liability. It can also mean lower tax liabilities at the end of the financial year, but this is by no means guaranteed.

As a limited company:

• You may be paying less corporation tax on profits than you would in personal income tax, especially at higher rates
• Restrictions on mortgage interest relief and relief on finance costs are more relaxed

But:

• There will be an additional layer of tax on what you pay yourself
• As property is considered an investment rather than a trade, you will be ineligible for some tax reliefs
• A number of buy-to-let mortgages are not available to limited companies, so you may find yourself having to take more expensive mortgages
• When you first incorporate, your property must be sold to the limited company, incurring capital gains tax, potential early repayment charges on an existing mortgage, and the costs of a new mortgage under the company

We’ve heard a number of people within the industry use a rule of thumb that it’s time to incorporate at about your tenth or eleventh property, but ultimately when and if you make the switch will depend on so many individual factors that this can only be a rule of thumb.

Whether you want to think about incorporation, aren’t sure if you could be more tax efficient, or just want to make sure you understand the finances of the business, get in touch – we’ll be happy to have a conversation.

The post Accounting Tips for Landlords first appeared on ICS Accounting.